Sharp expands blue laser diode production

Japanese electronics company Sharp announced that it has entered the business of blue laser diode manufacturing. Blue laser diodes are a key component of the next-gen drives used in Blu-ray and HD DVD players, including the ones used in the PlayStation 3 Blu-ray and Xbox 360 HD DVD add-on drives.

Sharp entered the market due to its potential to expand rapidly as next-gen drives become more mainstream, sales of next-gen games consoles are expected to syrocket, and the number of films being released on the new formats are set to explode as well.

Current production of blue laser diodes is handled mainly by Sony itself and a company called Nichia Corp. Sharp's production of the diodes originally started in November at its plant in western Japan, but now the company has decided to increase the capacity there from 150,000 a month to 500,000 by the end of next year. Sharp hopes it can take a chunk of the market, with around 15 billion yen (US$127 million) per year being cited as the potential sales target for the diodes.

MATTHEW'S OPINION
The production of blue laser diodes needs to expand to other companies, as we have seen that they can be difficult to make by looking at the amount of PlayStation 3 consoles that are available. The lack of blue laser diodes is one of the reasons Sony is struggling to meet demand. I hope Sharp's entry to the market will make things easier and reduce the costs of the component.

Since the next-gen formats are so new production costs are still high and this is being passed on to the consumer, with stand-alone players costing well above what the average individual can afford or is willing to pay.

A real coup for Sharp would be to get the contract for producing blue laser diodes for Microsoft or Sony's games consoles. Both systems are expected to sell well into the double digit millions, and this would ensure Sharp's growth in the market.

Sony must be happy at this news, even if they have to pay through the nose right now, getting more units out there is probably more important to them than the loss they take per unit. Perhaps now they will be able to maintain their market presence and stop over-estimating their capacity to deliver units. – by HighlandCynic